Concerns about aluminium's future in Gove

The Northern Territory Government hopes a decision will be made this week on a plan to help save a Rio Tinto alumina refinery on the Gove peninsula in remote north-east Arnhem Land.

The Territory's Chief Minister says any closure of the refinery could devastate the nearby mining town of Nhulunbuy, which has also become a service hub for Indigenous people in the area.

The Territory and Federal Governments are discussing a plan to pipe gas to the Gove peninsula in a bid to convince the company to keep the plant running.

The Rio Tinto-owned Pacific Aluminium is reviewing its alumina refinery and bauxite mine on the Gove Peninsula.

Dave Suter from the local Chamber of Commerce says businesses are already feeling the pinch as the company cuts costs.

"Talking to shopkeepers in the town, you get the idea that possibly their figures are around the 25 per cent downturn in business at the moment," he said.

Mr Suter says local businesses are starting to brace for an even bigger downturn if the refinery closes.

"Everyone is, whilst they're not really worried about it, they are concerned," he said.

"This probably is a good time for people to look at how they actually run their businesses, the costs associated with their businesses. We call it planning for the worst but hoping for the best."

One option on the table is suspending the operation of the alumina refinery but continuing to run the mine with an increase in bauxite exports.

However, the majority of the 1,400 jobs at Gove are linked to the refinery.

Klaus Helms is the chairman of Nhulunbuy's futures alliance, which was formed to prepare for all possibilities, including a drop in Nhulunbuy's current population of 4,000.

"You know, you're talking in numbers of, if this closure were to happen, a loss of around 2,500-odd people, which would be a major impact on the service delivery of this region," he said.

Since he arrived in Nhulunbuy in the late 1960s, Klaus Helms has watched the town grow into a service hub for the region.

"If you looked at all the services that exist at the moment, a huge proportion of that service is just for the mine. But the offset of that is that it also gives the region a better selection of services," he added.

One reason the Gove operation has been losing money is the high cost of the heavy fuel oil it uses to power the operation.

The company also supplies power to the town of Nhulunbuy and several Indigenous communities.

Klaus Helms is keeping an eye on renewed talks about piping gas from Katherine to Gove.

"We're all working hard to get gas to Gove to make this region survive, because it's pretty bleak if you look at the alternatives," he said.

The Northern Territory Chief Minister, Terry Mills, says talks with the Federal Minister for Resources, Martin Ferguson, have been positive.

"I think we are at the closing stages of being able to identify how we can have an aggregated quantity of gas that would allow a pipeline to be constructed and gas to be delivered to Nhulunbuy," he said.

The Territory Government is considering selling some of its gas and the Commonwealth has been assessing the risk of underwriting the pipeline construction and gas conversion, estimated to cost $750 million.

The Commonwealth says it is considering what it might to do to help alumina refining at Gove continue.